Covenant
A legally binding restriction or obligation attached to a property's title that controls how the land can be used.
What is a Covenant?
A covenant is a condition registered on the certificate of title that either requires or prohibits certain actions by the property owner. Common covenants include building material requirements (e.g. no corrugated iron roofing), minimum floor area sizes, fencing standards, or prohibitions on certain uses.
Covenants are typically imposed by developers when subdividing land to maintain neighbourhood character and property values. They can also be imposed by councils or agreed between neighbours.
Covenants run with the land, so they bind all future owners — not just the person who originally agreed to them.
Why It Matters for Due Diligence
Covenants can significantly limit what you can do with your property. A covenant requiring brick construction could add tens of thousands to your building costs. A covenant prohibiting home businesses could affect your livelihood.
Before buying, have your lawyer review all covenants on the title. Consider whether they align with your plans for the property, including any future renovations or changes of use.
How to Check
Covenants are registered on the certificate of title and referenced in covenant instruments held by LINZ. Your conveyancer will review these as part of the standard title search. The LIM report may also reference council-imposed covenants.
Frequently Asked Questions
Can a covenant be removed or changed?
Yes, but it usually requires agreement from whoever benefits from the covenant (often neighbours or a developer). If agreement can't be reached, you can apply to the High Court under the Property Law Act 2007 to have it modified or cancelled.
What happens if I breach a covenant?
The person or entity who benefits from the covenant can seek a court injunction to stop the breach and potentially claim damages. In practice, enforcement depends on whether anyone chooses to take action.
Related Terms
Easement
GlossaryA legal right allowing someone to use part of another person's land for a specific purpose.
Freehold
GlossaryThe most complete form of property ownership in New Zealand, giving the owner full rights to both the land and any buildings on it.
LIM Report
GlossaryA Land Information Memorandum — an official council report summarising everything the council knows about a property.
Resource Consent
GlossaryPermission from the local council to carry out an activity that affects the environment, required under the Resource Management Act 1991.
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